I commence this part of our meeting by welcoming the Minister for Finance and for Public Expenditure and Reform, Deputy Donohoe. He is accompanied by his officials, Mr. John Kinnane from the Department of Public Expenditure and Reform and Mr. Joe Cullen, Ms Anne-Marie Walsh, Ms Scline Scott, Mr. Paul Cotter and Mr. Stephen McDonagh from the Department of Finance. I thank the Minister very much for attending this pre-budget scrutiny session. The committee regards our opportunities to engage with the Minister as key milestones in our budgetary scrutiny work. I also acknowledge the assistance of the Minister's officials. I now ask the Minister to make his opening statement.
Pre-Budget Scrutiny: Minister for Finance
I thank the Chairman and the committee for the opportunity to be here today. The budget will build upon the parameters outlined in the summer economic statement. Regarding the economic backdrop, the Irish economy continues to grow at a robust pace. Gross domestic product, GDP, growth of 8.2% was recorded in 2018 while growth of 3.9% is forecast for this year. We have one of the fastest-growing economies in Europe, the public finances have significantly improved and last year, the country had an underlying surplus for the first time since 2006.
This year a general Government surplus of 0.2% of GDP is projected. The general Government debt-to-GDP ratio is expected to fall further to 61% by the end of 2019, bringing it below the euro-area average of 86%. We are close to full employment, with the unemployment rate at 5.2%. However, some significant risks remain, including the increasing likelihood of a no-deal Brexit. There is also increasing evidence of a global economic slowdown, with the decline in growth of advanced economies occurring at a more rapid pace than previously anticipated. As Ireland has a small open economy, with a high degree of integration in the world economy, any further escalation in trade protectionism would also have a strong impact on Irish growth forecasts. There are also vulnerabilities in the public finances arising from the high concentration of corporation tax receipts. Furthermore, there is a domestic economic risk related to overheating as the economy approaches full employment. In summary, the economy is positioned between possible overheating, on the one hand, and the very real possibility of economic disruption, on the other. Framing the budget will, therefore, be more challenging than usual. The appropriate budgetary strategy is to build up resources that can be deployed in the event of a slowdown. We will aim to build on what has gone well in recent years, but we are doing so at a time of real change.
Earlier this year I outlined two budgetary approaches, while last Tuesday I decided that the budgetary strategy should be formulated on the assumption of a no-deal exit of the United Kingdom from the European Union at the end of October. Consistent with the fiscal projections published in the Stability Programme Update, SPU, the framework for the budget involves a budgetary package of €2.8 billion for 2020. Of that budgetary package, €2.1 billion is already pre-committed, with an expenditure reserve of up to €200 million, with the capacity to accommodate funding requirements for the national broadband plan and the national children’s hospital. That leaves €700 million to be allocated specifically in that part of the budget. In the event of a no-deal Brexit, the Government has stated t will provide counter-cyclical support for the economy through social protection payments occasioned by higher unemployment and, on the revenue side, lower tax collections. The Government has also indicated that it will introduce timely, targeted and temporary measures for the sectors most exposed. Brexit contingency support may also be needed to address specific issues in the event of a "worst case scenario" of a disorderly Brexit. This may lead to a deficit in the order of 0.5% to 1.5% of national income next year, amounting to a negative swing in the headline balance of up to €6 billion. In that context, the scope for budgetary measures, outside the Brexit-support package, needs to be constrained. As such, all Departments need to ensure expenditure this year is managed within the allocations agreed by the Government and voted by Dáil Éireann and, where expenditure pressures emerge, that mitigating measures are put in place.
At the end of August gross voted expenditure of €42 billion was 0.6% below profile, with gross current expenditure 0.3% below profile and gross capital expenditure 3.7% below profile. Year-on-year expenditure growth was 6.5%, with current spending up by 5.1% and capital spending by 25.5%. The year-on-year increase of 6.5% at the end of August compares to the budgeted for full-year increase of 5.8%. Health current expenditure has a budgeted for full-year increase of 5.8%. At the end of August health expenditure was up by 6.7% year on year.
Given the priority placed on ensuring the delivery of sustainable improvements in the health service, with an overall allocation of €17.1 billion this year compared to expenditure of €14.1 billion in 2016, it is crucial that health expenditure, which was within profile at the end of August, continues to be proactively managed with all the necessary measures implemented to mitigate the risk to the public finances from an overrun this year. This is why it is critical the expenditure position for budget 2020 is managed within the parameters set out in the mid-year expenditure report. Departments are all required to reprioritise and manage spending to ensure offsetting measures can be put in place to mitigate the impact of emerging expenditure pressures and proposed new policy priorities.
We have always been clear that the UK's exit from the European Union will have a detrimental impact on our economy and public finances, whatever form it takes. Work on a no-deal Brexit has the highest priority across government. From a budgetary perspective for Ireland, which is the member state that will be most directly affected, it means ensuring we are as prepared as we can be for whatever outcome emerges. We have taken steps in our national finances, capital investment plan, work on the rainy day fund and broadening the tax base. We have also taken specific steps, including publishing two comprehensive contingency action plans, holding more than 1,200 stakeholder preparedness events in key sectors throughout the country, enhancing physical capacity at our ports and airports, providing training and financial supports to increase our customs capacity, recruiting additional staff in key areas and supporting additional dedicated measures to get Ireland Brexit ready in the budgets for 2017, 2018 and 2019.
Budget 2019 included an allocation of €115 million in a number of areas, including increased resources of €25 million in a range of Departments, a €71 million package for the Department of Agriculture, Food and the Marine, an increase of €14 million to the current allocation for the Department of Business, Enterprise and Innovation, €5 million for the Department of Foreign Affairs and Trade and €13 million to support the opening of new markets and a higher international profile though our Global Ireland 2025 strategy.
Budget 2019 also put in place a longer-term loan scheme for terms of up to eight to ten years to provide a longer-term scheme facility of up to €300 million to support strategic capital investment for a post-Brexit environment. This will be jointly funded by the Departments of Business, Enterprise and Innovation and Agriculture, Food and the Marine.
Further work is under way. The Getting Your Business Brexit Ready – Practical Steps campaign focuses on the nine steps every business should take to help prepare for Brexit. Revenue has issued tailored letters to more than 90,000 companies. Work is also under way to issue targeted letters to approximately 10,000 traders who traded with the UK in the first quarter of 2019 and who are either new operators or in businesses that are newly trading with the UK. We have launched the Clear Customs initiative. The Department of Business, Enterprise and Innovation has had direct engagement with more than 200,000 businesses via a tailored email issued by the Companies Registration Office. Through LEOs, Enterprise Ireland is encouraging businesses to avail of the Prepare Your Business for Customs workshops. InterTradeIreland's Bitesize Brexit campaign covers quick and practical steps for cross-Border traders.
On fiscal vulnerabilities, the high concentration of corporation tax receipts continues to represent a more vulnerable revenue stream. This is why I stress that public spending must be financed on revenue that is predictable and sustainable. Work is under way to examine the future sustainability of tax receipts in this area.
The management of the economy means that Ireland is facing the challenge of Brexit from a position of strength. However, I am under no illusion about the challenges that could approach. Our job now is to build on the progress made to date. In the forthcoming budget, we will use a well-run economy and the progress we have made in recent years to support and protect our people at a time of unprecedented uncertainty.
I thank the Minister for his opening statement.
I thank the Chairman, the Minister and his officials. I want to raise some specific points. During the summer I met a number of car dealership owners in Kildare, who are constituents of mine. They highlighted their concerns about changes due to be made in 2020 to the CO2 testing regime and the potential impact of the changes in bands on the price differentials between old and new cars, with specific reference to car imports. Their view is that changes to the VRT regime are needed to take account of the distortions that will be caused by the new CO2 testing regime. There is a lot of concern about this issue in car dealerships. I want to check that this is something with which the Minister and his officials are familiar and of which they are aware. I would like to hear any view the Minister might have on it.
The Minister referenced Brexit. We are all concerned about the level of Brexit preparedness. Looking at the key economic indicators in assessing how well prepared businesses are, I am conscious that the economic operators' registration and identification, EORI, number is something an Irish business will need to have to import into and export out of the European Union. Irish businesses will need to have an EORI number to be able to trade with the United Kingdom post Brexit, while UK businesses will need to have a number to trade. Does the Minister have statistics or numbers to indicate where we are with applications for EORI numbers? Has there been an increase recently?
Last week Mr. Seamus Coffey of the Irish Fiscal Advisory Council, IFAC, came before the committee. I raised my concerns about IFAC's role in the costing of Opposition party budget proposals. In particular, I referred to Fianna Fáil's growing list of spending promises made it seems to every group. The total cost was €14.35 billion in the first six months of 2019. In his response Mr Coffey highlighted IFAC's narrow mandate to assess the fiscal and macro plans set out by the Government. He highlighted that the bodies in other EU countries with a similar mandate to that of IFAC also worked on costings and the plans of Opposition parties. Yesterday I wrote to the Minister to ask whether the Department was open to enabling a broader costings function in IFAC's policy framework.
I thank the Deputy. On his point about the CO2 testing regime and the consequences for the motor industry in Ireland, I met the Society of the Irish Motor Industry, SIMI, the representative body for car dealerships in Ireland, and we had a lengthy discussion on its concerns about the impact of introducing tax payments based on the real-time emissions of cars. We also had a lengthy discussion on the impact of car imports on the sale of new cars in Ireland. The mix has consequences for tax collection. I saw some comments by SIMI today on the issue. All I should say at this point is that I am certainly aware of the issues it has raised and that we will give them consideration. Last year we introduced a new diesel surcharge to better reflect the environmental consequences of some diesel vehicles. In the coming weeks I will have a look at whether further changes are needed. I am aware of some of what is happening in the car industry and some of the changes in the numbers of new cars being sold and the composition of all car sales in the country.
On where we are with EORI registration, this was an issue that received some attention earlier in the year. As the Deputy is aware, all businesses will need an economic operators' registration and identification number to trade with the United Kingdom if and when it becomes a third country.
Some 5,000 businesses registered in August alone and that was an increase of 600% on the July figure. There has been a significant increase in the number of registrations that have taken place. A total of 88% of the import trade with the UK in 2018 was carried out by businesses which now have an EORI number. The comparable number for export trade is 95%. There has been a significant shift in the registration of traders to get their customs numbers in place.
That said, my concern is there is a large cohort of smaller companies whose share of trade with the UK is small or the share of whose imports from the UK is small as a percentage of total trade. There are, however, many of these companies, all of which employ people and create income and jobs in their communities. While we have made progress on customs preparedness across the summer, more needs to be done in the coming weeks.
Finally, on the point about looking at the mandate of IFAC, that is something to which I will give consideration.
Cuirim fáilte roimh an Aire agus a chomhghleacaithe chuig an gcoiste.
I will start with Brexit. The Minister says that he is planning budget 2020 on the basis of a no-deal Brexit. Can he explain whether that means the official statistics to be contained within the budget book will show that Ireland expects to have a deficit in the region of €5 billion next year or will the Minister provide two options?
We will probably do it in a staged approach but we are debating that at the moment. If we continue in a deal environment or an agreement environment next year, we will point to the level of surplus we will have. We would expect a growth in our first surplus of this year into next year. We will be outlining in the budget documentation the predicted outcome in respect of our national finances if a no-deal Brexit occurs at any point next year.
The level of certainty about some of those impacts is different to other kinds of economic planning that we have done because it will obviously depend on when in 2020 a no-deal Brexit might occur. Even now, despite all the modelling we have done, it is still difficult to be definitive about the exact impact on our economy.
There are fiscal rules that apply whether the country is in deficit or not. Will there be two sets of official statistics, based on either scenario, or will there be a set of official statistics and then, if a no-deal Brexit happens, there will be second set?
There will be one set of official statistics but they will have a contingency within them.
The set of official statistics will be the one that shows the surplus and the contingency will show the Brexit scenario.
That is my current thinking on the issue. We will not be producing two sets of accounts.
So the budget is being framed, from a statistical point of view, on the basis of a no-deal Brexit but the budgetary measures are being framed with a more cautious approach in terms of the possibility of no deal. Is that an accurate reflection of the position?
Yes. We are taking a cautionary approach within the €2.8 billion but, as I have outlined, I expect that additional measures will be needed in the case of a no-deal Brexit.
Let us deal with that because the summer economic statement gave us two lines about what would happen in the case of a no-deal Brexit, which were to the effect that €700 million would be used to deal with that issue. Is the Minister suggesting that there would be additional, temporary measures to address specific issues in the case of a no-deal Brexit, over and above that €700 million, or is he suggesting that unless further income is generated, the €700 million would be the entire package?
I am saying that if we find ourselves in the position where we have to deal with a no-deal Brexit, additional measures will be needed which will, in all likelihood, amount to more than the €700 million.
Would that be decided after the budget day announcements?
No, I would outline the measures on budget day.
Okay. As it stands, the package will be €700 million, plus an extra amount.
I will obviously be looking to constrain the extra amount because I want to get the balance right. We must put in place the right measures that are needed to support the economy. A considerable fund will potentially be needed to do that, but, at the same time, we need to put in place measures that will be temporary and targeted in order that we will be in a position to move from that level of support when the time comes.
In the context of a no-deal scenario, we would be in deficit; therefore, the resources to which the Minister refer to would have to come from additional borrowings. None of us knows what the real impact of Brexit will be and I am not asking the Minister to predict what it will be, but we have indicative figures that suggest there could be a deficit of €5 billion. That is the base line that was set out in the summer economic statement. Can the Minister give a sense of the size and scale of additional, temporary measures envisaged? Are we talking about a figure of €1 billion, €2 billion, or much less? That will obviously have an affect on the overall deficit figure, possibly moving it from €5 billion to €6 billion or €7 billion, depending on the scale of the measures the Minister has in mind.
I will correct one thing. The Deputy mentioned a deficit of €5 billion. That is not the case. We anticipate a swing of up to €5 billion to €6 billion if we were to go all the way to 1.5% of national income. The work on the composition of the additional measures is not yet done. I am engaged with the Department of Agriculture, Food and Marine, the Department of Business, Enterprise and Innovation and the Department of Transport, Tourism and Sport on the measures that might be needed in a no-deal setting.
The €5 billion figure comes from the summer economic statement which shows a range of 0.5% to 1.5%. I am using the figures the Minister presented in the summer economic statement which show there is the potential for a deficit of €5 billion in year one. The question for the Committee on Budgetary Oversight is about the amount. I do not expect the Minister to answer to the nearest euro or cent, but are we talking about an amount in the hundreds of millions or billions for the temporary measures that would be needed to address a no-deal scenario?
At this point, we are talking about an amount in the hundreds of millions of euro. but we are in the early stages of confirming this with the Departments I have mentioned.
The Government has predicted job losses in the hospitality and tourism sector in the amount of approximately 10,000 in the event of a no-deal Brexit. Can the Minister indicate the other sectors and the numbers of jobs likely to be lost in the event of a no-deal Brexit? Can he outline any policy initiative that would, in any way, support or protect those jobs?
The figures my Department have produced show that there are 55,000 jobs at risk. They are a mix of jobs not created and jobs lost. As we are not able to make a sectoral analysis with any degree of accuracy, I am not going to put figures in front of the committee that I will subsequently be unable to stand over. The supports that will be provided will vary in different parts of the economy. Some parts of the economy will need some grant support to deal with the changes through which they are going. We may need to look at other measures, for example, for what the agrifood sector could face.
The 10,000 jobs predicted by Departments to be lost in the tourism and hospitality sector is a large number. Some of the job losses will be concentrated in particular regions. Is it time for the Government to revisit the decision it took last year to increase the VAT rate to 13.5% in one fell swoop, given what the tourism and hospitality sector may be facing into?
Is that one of the options the Minister would look at?
There are other options we can look at that would have a beneficial effect in dealing with the potential shock we face. I have noted some of the analysis on the change in visitors to different parts of the country. Much of that is driven by consumer confidence in other countries and the income levels in those countries. We need to bear that in mind when examining the policy response. There are two levels to my current thinking on this point. First, I am well aware that some parts of Ireland will be affected differently to others, such as is the experience of the Deputy's constituency. This is a factor in the work I am undertaking at present. I refer to Border counties and areas that are particularly dependent on tourism. Second, I must consider access to the country and awareness of everything Ireland has to offer from a tourism perspective. I am examining these areas with the Minister for Transport, Tourism and Sport, Deputy Ross. I am well aware that the impact of Brexit will be felt differently in different parts of Ireland.
I am glad to hear that as I have been making that point. It is not only tourism where the north west will be hit hardest but also manufacturing, along with the south east.
I refer to the customs checks which will arise in the context of a no-deal Brexit and that the Government is now discussing with the Commission. The Taoiseach has stated that checks will be required near the Border. Has the Minister factored this into his estimates for 2019 or 2020? Can he give the committee and indication of how many different locations there might be in close proximity to the Border, or near the Border as the Taoiseach said, where they would have to be set up? Can he speak on the employment of the personnel needed to carry these checks out? I ask this question while mindful of my complete disagreement with the idea of customs checks. It must be resisted by the Government. It will harden the Border on the island of Ireland, it undermines the Good Friday Agreement and serious consequences arise from it. However, my questions are from a budgetary perspective, that is, on the cost associated with the personnel to man them and the number of checks that will be required near the Border. I know none of this is nailed down now but will the Minister give an indication of what we face?
I absolutely understand all the sensitivities on the potential location of checks. This is the very reason why we are standing by the need for the backstop and standing over the principle of regulatory alignment. As the Deputy knows well, the way we can ensure that all our commitments to the Good Friday Agreement, to the need for frictionless trade on the island of Ireland and to our membership of the Single Market can be reconciled is through the principle of regulatory alignment as an insurance policy. That is why we have stood by this principle for two and a half years. To be fair, the Deputy and his party have understood this.
On whether I have made any decisions on the number of checkpoints or on hiring staff for them, the answer is "No". I have not done so because work and engagement with the Commission on the area is still ongoing and we are deeply mindful of the sensitivity to which the Deputy refers. I am deeply aware of the need to be very careful in this area. I reiterate that this is why the backstop is so important and why the principle of regulatory alignment is the answer to the Deputy's questions in the long run. The reason we are even considering this is that at some point, we need to be able to give assurance that the manufactured goods being made in Donegal, which are being sold elsewhere in Europe, are being made in Donegal.
Ultimately, this is about how we can protect jobs and investment in Ireland. We wholly appreciate the sensitivity around this, which is why the backstop and regulatory alignment is critical and why so much work is being undertaken on it.
We could have a whole session on this. I appreciate that.
There will be time to come back in. I next call Deputy Breathnach.
I thank the Minister and officials for their attendance. I will start where the Minister left off, namely, on regulatory alignment and specifically on the need for some form of fiscal alignment, particularly from a cross-Border perspective. To what degree are the Minister or his officials speaking to the Chancellor of the Exchequer or the person responsible, David Sterling? For example, the Minister has flagged well his intention to introduce some form of carbon tax this year. The detrimental effect of what is mooted would probably equate to approximately €2 or €3 on a full tank of petrol or diesel. Another more recent example is the commitment to reintroduce duty free shopping. While everyone along the Border will welcome the opportunity to go on booze cruises, the much lauded and appreciated Carlingford Lough ferry will become a booze cruise because of the differential rates in VAT and taxes. Ultimately, such differences in respect of commodities will drive people to both buy fuel and to do their weekly shopping across the Border. I think I am expressing the view of most Border Deputies that some sort of fiscal alignment needs to be guaranteed. I suspect that was happening in recent years, as the differential in price between those commodities were very small.
Earlier this year, the Minister indicated to this committee that there would be contingencies on a sector-by-sector basis for supports that were needed, particularly from the EU. He gave a commitment that those packages would be in place. Will he reiterate that assurance? As I stated then, one only needs to look at the current beef crisis, where we had an allocation of €100 million earlier in the year, but it took so long to trickle through. The sectors must be supported and guaranteed the necessary finance, not in three or six months', but almost immediately.
The Parliamentary Budget Office has clearly flagged the Minister's remarks about the sustainability of corporation tax, which rose from €2.3 billion in 2015 to around €4.2 billion in 2018. We all know it is not sustainable but I was alarmed by the figures provided to us. Some 77% of all corporation tax receipts come from the multinational sector, as do 22% of employment, 25% of income tax and USC and 39% of gross value added. We have been given figures to the effect that were one of these multinational companies to exit, it would amount to a loss to the economy equivalent to €430 million. That is equivalent to the carbon tax figures referred to by the Minister. We all know this cannot be sustained. What are the Minister's plans to correct this? Were we to lose one or two, and it is all possible in a downturn, we would be in serious difficulty.
Fiscal alignment between Northern Ireland and Ireland has not yet featured in my engagement with the new Chancellor of the Exchequer. I am well aware of the sensitivity of any decision that I make on carbon tax to petrol stations and local trade in Border counties. It is not that long ago that cross-Border shopping and trade flows were significant issues to our economy and had many impacts, including on tax receipts.
The Deputy's second point related to duty free. When I introduced the Brexit omnibus Bill earlier in the year, I made clear that I would only introduce duty free on a reciprocal basis. If the United Kingdom made a decision to introduce it - it has now indicated that in a no-deal situation it would introduce it - we would then give an indication that we would do the same. One of the reasons for doing that is to ensure that we are treating all third country passengers the same in respect of the shopping facilities available to them.
On the engagement we have had with European Commission about dealing with a no-deal Brexit, the EU has referred to the fund that was made available to deal with the consequences of the change in pricing for farmers in the beef sector and the major difficulties they are facing. I understand the most recent figures indicate an uptick in the drawdown of that fund. I expect that to continue as the level of challenge the Deputy mentioned grows.
On the work the Parliamentary Budget Office has done, the Deputy touched on many vulnerabilities. During the global economic crisis from 2008 up to quite recently, we increased our share of foreign direct investment into the country. While he is correct to say there is always the possibility of a company leaving, which would have serious consequences for employment and tax take, there are two ways of responding. The first is by running budgetary surpluses. We began the slow process of putting in place a budgetary surplus for this year. I hope to grow it next year, assuming we work our way through Brexit. Separately, through projects like the future jobs programme, we will put in place the kinds of programmes we need to create new forms of work that are either higher value within the international sector or are located outside the multinational sector.
I thank the Minister for making himself available for a discussion on the prospects associated with what is not necessarily a contentious budget, but an important and pivotal one on the crossroads we may be at. It is imperative to have a greater understanding of the implications and what the State needs to do to cushion ourselves against the calamitous events that might ensue.
As the Minister has alluded to, with a no-deal Brexit we would be facing substantially greater budget deficits, increased borrowings and growth forecasts adjusted downwards. Is it not inevitable, therefore, that there will be an almost immediate impact on the ongoing capital development plan? We have had many announcements associated with Project Ireland 2040. Investment in transport alone will be €25 billion over ten years. A capital investment of €2 billion this year has been announced in the area of health.
The Minister has said that the surpluses that will be available based on the projected growth rates will inevitably pay for the national broadband plan over time. In the absence of a contract being signed for that project, is there a cost on the State having conferred preferred bidder status already? I asked that question some months ago and am still awaiting the answer. What are the Minister's thoughts on that?
An extra €2.4 billion has been pumped into health since 2017. The constituents we represent do not see that manifested on the ground. They do not see the sorts of inroads one would have expected to address waiting lists.
While there is a commitment in name to the all-party committee's recommendations, will we now see less provided for their implementation because of the impact of a no-deal Brexit? Therefore, we will continue not to see the impact we would like on waiting lists. We will continue not to see the great increase in funding manifesting in the availability of home help packages or hours or assessments for those most in need.
Earlier this year the Government committed to having a health oversight committee. Has it met? Has it been effective? What improvements have ensued because of it? Are we still facing an overrun? Are the minutes of meetings of the committee available to us and the public to ascertain if it is having the effect the Government sought? We are told that there is something to be learned from our past and the failure to rein in in a timely fashion our dependency on revenue that accrued from the property sector. In recent weeks others far more qualified than I have pointed to the same mistakes being made with the windfall in corporation tax receipts. In that sphere the Minister said he would carry out a study which would be available in March. In the context of a no-deal Brexit and given the perilous nature of the State's finances as a result of commitments we have to make, would it not advisable for the Minister and is it not incumbent on him and his Department to bring forward the study at this juncture in order that it can play its part in informing the House in making the right decisions as it is expected to do so on the budget?
I acknowledge the role Deputies Cowen and Michael McGrath are playing in framing the budget at a time of national risk. We all hope the risks will not materialise. Even though we are framing the budget on the basis that there will be a no-deal Brexit, of course, every effort will be made to avoid that taking place through the diplomatic and political work in which the Government is involved.
The Deputy asked about the public capital plan and Project Ireland 2040. The case I will be making to the Dáil and the public is that if Brexit is actually happening, with the effect it will have across the island, this is the time to stand by Project Ireland 2040 and deliver on our commitments. One of my big learnings during the economic crisis and in its aftermath was that very sudden and large reductions in public capital investment meant that in many cases the need was greater when an economy recovered. If we are moving through a slowdown of economic growth, in many ways Project Ireland 2040 is the best possible response.
The Minister, Deputy Bruton, will bring a report to the Cabinet on the debates that took place at the Oireachtas Joint Committee on Communications, Climate Action and Environment on the national broadband plan. The current bidder is still the preferred bidder, but the Minister will bring a report to the Cabinet to update it. On a related point, the parts of the economy and country that will suffer the most in the event of a no-deal Brexit are also the parts that have the potential to benefit the most from the roll-out of the national broadband plan.
On health expenditure and current performance to date, at the end of August we had budgeted for an increase of 7.1%.
At the same point in the year we had an actual increase of 7.9%, which was a difference of 0.8 percentage points, whereas at the same point one year ago that figure was 3.2%. There is a different level in terms of where we are with the management of health expenditure, but I am still very much alive to risks that could materialise later in the year. How we deal with that potential risk is a massive area of ongoing focus for me.
I shall now turn to the health expenditure oversight group. The group met eight times this year. Reference was made to the minutes of the group meetings being available. Many of the minutes from this group have been in the national newspapers where details have been outlined in a fair bit of transparency. The agenda for those meetings and the work that has happened has been around where we are - from a budgeting view - with recruitment for different parts of our health service and where we are with spending versus what was budgeted with regard to different sectors within the HSE service plan.
The Deputy's final question was on bringing forward the work on the sustainability of corporate tax receipts. I will certainly give this consideration but between now and next March the action step is going to be the same. The action step will be in the context of a no-deal Brexit taking place and to try to ensure our surplus next year is as high as possible so that if we end up in a no-deal situation the effect on our national finances will be more manageable. I will, however, talk to my officials about it and see if we can make that work available to the House more quickly.
In relation to-----
I am sorry Deputy Cowen but you are out of time for the first round of questions and have used the four minutes.
I did not.
You did use the four minutes.
There were others who used more than me.
I can assure Deputy Cowen that I time absolutely every Deputy the same and give all members the same time. There is a second round, in which the Deputy can come back in to follow up with the Minister, but I have three more Deputies from the first round and then I will come back to other Deputies. I invite Deputy Burton.
I welcome the Minister here today. The Minister has already indicated that he is not inclined to change income tax credits or allowances for people paying income tax, which is the whole PAYE sector and others who pay income tax. Speaking at this committee last week the chairman of the Irish Fiscal Advisory Council indicated that this is worth some €600 million. At a time when workers' incomes are rising by about 3% per annum it would actually generate a plus to the State of some €600 million. Today I heard the Taoiseach suggest that it may now be identified as some €700 million. On budget day this is going to be the key area within which the Minister will have to play around. I appreciate the very difficult constraints of Brexit; we all do.
I want to find out, however, if the Minister is seriously thinking of no social welfare increases at all. There are two points to be made in this regard. The Minister must bear in mind that people who are carers, are pensioners or who have a serious disability - especially those who are over the age of 55 - have no capacity to go out to get extra work to earn extra income, and therefore they are particularly vulnerable. While not disclosing the details of his budget, perhaps the Minister would share with us his thinking on this very important group of people. I am aware it is very difficult. I recall as a Minister inheriting a requirement for €440 million of cuts in the deal done by our predecessors in Government. I got that figure down to some €200 million. I cannot understand that the Minister and the Taoiseach could actually be contemplating no increases in social protection.
I understand the Minister has been cautious in his use of language, but I believe many of the PAYE workers who are contributing the €700 million to the Exchequer are glad to see that it goes towards something important. The demographics show that there has been an increase in the number of pensioners, as well as in the number of carers, which is linked with the rising age of the population. In a way, this is a great boon to the State, but I cannot understand how it will be dealt with, especially in the context of Brexit and the recent developments in oil prices.
The Irish Fiscal Advisory Council, IFAC, and other commentators on the economy and the European Union are concerned about the skills shortages in the building industry. I have raised this issue with the Minister and the Taoiseach. I stress to the Minister that areas with significant pockets of high unemployment are being left behind as the rest of the economy tightens with almost full employment. The performance is very poor in taking on trainees and apprentices. Will the Minister put a rocket under whoever runs SOLAS? Ireland will need to import people, for whom we do not have homes, to build houses as happened during the last boom. That is what then helped the economy to crash. Everyone here is prepared to work with the Minister on this issue if we can get that to happen.
My third question-----
The Deputy is over her time.
-----is about smuggling.
The Deputy literally has ten seconds, to be fair to-----
It is just one sentence.
Okay, one sentence.
We are potentially looking at a smuggling zone. Nobody wants a hard border, but I understand there are about seven gangs operating along the Border, some of which have loyalist links, while the majority have republican links. What will the Minister do to deal with the smuggling issue? When I was in government we had lots of briefings.
We have the Deputy's question.
The Minister must also receive lots of briefings on smuggling.
I thank the Deputy for her questions. She is right that the benefits of non-indexation of the tax code amount to approximately €600 million per year. She will be aware that as they already form part of the summer economic statement, there is no additional money, as a result of the announcement I made last week.
On the Deputy's second point about social welfare changes-----
My point was about the source of the additional money.
It is certainly one of the sources. It is a fair point.
On the Deputy's question about social welfare changes, I represent a constituency which is beside hers. I have many constituents for whom social welfare payments make a gigantic difference. They are not in work and the payments make a very big difference to their standard of living. Many of them do not have the opportunity to benefit from the changing and improving incomes we have seen in the past two years. I am, therefore, well aware of the importance of social welfare policy to such persons. There will be a social welfare package included in budget 2020, but its scale and composition will be different from that in previous years. I will be working with the Minister for Employment Affairs and Social Protection, Deputy Regina Doherty, and Fianna Fáil on it. Guiding it will be an appreciation that social welfare payments and parts of the social welfare code make a very big difference to some citizens.
On the issue of skills shortages, I had a meeting with the Construction Industry Federation, CIF, a number of weeks ago and this was the key item we addressed. We discussed apprenticeships and how - even now there are 100,000 fewer people working in the construction sector than a decade ago - we needed more people working in it. We need more people who are living in Ireland to work in the sector. We have a construction sector working group, on which the CIF and other bodies are represented. We are looking at a few ideas to see if we can increase the awareness of apprenticeships and do more to encourage more men and women to take them up.
I turn to the Deputy's question about smuggling.
I am well aware of the level of risk we could face from smuggling and other illegal activity in a no-deal setting.
Will the Minister put a calculation on that-----
I am sorry but the Deputy may follow up in the next round.
I thank the Minister and his officials for their service. Some of the questions I had intended to ask have been asked. The Minister mentioned apprenticeships, which has been a hobby horse of mine for several years. He needs to start not where he has done but rather engage in education. As I stated at another debate when representatives from the Construction Industry Federation appeared before the committee, this year, as always, there were hours of wall-to-wall coverage of leaving certificate results and of the Central Admissions Office process, whereas only three minutes were given to apprenticeships. The change has to start in school and it will take a while for it to spin off. We have to begin a process of valuing apprenticeships and putting them on an equal platform to a college education. That is a matter for another day but the Minister might bear it in mind.
On the control of the health budget, is the Minister aware of any budgets that had always been under the health Vote but that were transferred to the Vote of other Departments?
No, not off the top of my head. If in the course of this exchange, however, one of my officials tells me otherwise, I will share that with the Deputy.
I appreciate that.
The Department of Children and Youth Affairs has some functions that were previously fulfilled by the Department of Health.
The Department of Children and Youth Affairs was founded during the previous Government-----
I refer to changes within the past year.
There were no such changes in the past year.
I do not know the answer to the following question, which relates to the Minister's function with the Revenue Commissioners. We envisage there will be another overrun in the anticipated corporation tax take, that is, that it will exceed expectations. If that happens, how does the Minister intend to use any excess over what was anticipated?
The Committee on Budgetary Oversight has received many warnings in the past two or three years about the over-reliance on a small number of significant contributors to the large corporation tax figures. Does the Minister discuss such matters with the Revenue Commissioners? They do not reveal the details to the public but they know who pays tax and who the big payers are. Does the Minister know who the big payers are? I presume the answer is "No" because it is a confidential matter. Is there any mechanism for the Revenue Commissioners to warn the Government if they notice a significant decline in the corporation tax paid by a principal contributor over, say, the past five years? Are there any warning lights? IFAC is not able to give us the information.
I take the Deputy's point about apprenticeships but we might debate that another day.
To respond to the question about what would happen if there was another over-delivery in corporation tax receipts later in the year, we have put such focus on our health expenditure this year in order that we can manage it differently from what happened last year, which, as I have stated to the committee numerous times, I do not want to see repeated. The total level of Supplementary Estimates last year, which materialised between September and November, was not acceptable and I do not intend that to be repeated this year. I am working to ensure that as much as possible of the additional corporation tax we collect will feed into our national finance position, as opposed to it dealing with the cost of Supplementary Estimates.
On the question about the Revenue Commissioners and how they engage with me, they share information with me regarding the concentration of revenue tax collection within various sectors, by decile. That information is publicly available and they share much of it with the Oireachtas. I believe that the Deputy has used it, as have other Deputies. They do not provide much beyond that to me in private, nor would I ask them to. We have a large cases division, which manages tax collection from the largest employers. The information is sometimes shared with me in different aggregates from what might be provided publicly, with a little more detail but not enough for me to know who pays what. That is not made available to me and I would not request it.
This is why I believe that the work Deputy Cowen mentioned is important and why I want it to be done by the Department of Finance rather than by a third party. IFAC finds it difficult to answer the question. I have a number of views on what I expect to happen but the answer will depend on what happens sector by sector. My Department, therefore, should do that work and should have a different level of engagement with the Revenue Commissioners to be able to give the House a better answer on the medium-term sustainability of corporation tax collection.
I understand why the Revenue Commissioners would not share details of the principal contributors but my question is whether there is a facility whereby they can raise red flags for the Minister and highlight if they notice a significant decrease, for example, in the corporation tax collected from one or two of the largest contributors in the past year.
Not really. It is a strength of our institutions that the only job of the Revenue Commissioners is to collect tax in accordance with the law. Nevertheless, because of the growing concentration of corporation tax receipts within certain companies, and the growing share of that in the scale of our total tax collection, we need a different approach to how we manage the issue in the future. We recently appointed an independent expert, Mr. Seamus Coffey, to produce a report on the matter. He did great work on it and it has been very helpful to me. We need a different level of private engagement with the Revenue Commissioners, and only my Department can do that. They do not raise red flags or make forecasts beyond what we make in the budget book seen by Deputies because they are not charged with doing that.
I turn to vehicle registration tax, VRT, for diesel and petrol. I attended a conference earlier where somebody stated that, when taken in the round, the impact of electric cars will be to reduce carbon emissions by approximately 20%. In light of all the ballyhoo, that is not very significant and it does not take into account that when they are run in Ireland, they probably are powered by fossil fuels. What is the Minister's latest thinking in that regard? We could be very good in Ireland, given that the Minister is late in addressing the matter. Perhaps that is not a bad thing for devising policy because we can learn from other countries. The matter is reflected in car sales. Consumers are confused about the best step to take. Should it be hybrid or electric or where are we going to be? I am not trying to trap the Minister but instead trying to understand his thinking on the matter.
The tax strategy group published a paper during the summer that examined the issue to which the Deputy refers. We will have to make changes to VRT to align it with environmental performance. Due to the changes happening at European level, we are introducing real-time emissions testing. The paper was well received by the motor industry because it was clear. I will work on the issue in the next few weeks.
In response to Deputy Lahart, a 20% reduction of itself is still valuable and is still worth having. I am sure he would agree with that, but I believe that saving will improve over time. As the technology that is available to the motor industry continues to improve, the contribution that either hybrid or electric cars can make to our climate challenge will improve too. I am not just looking at measures for the vehicles that are available now. I am thinking about the vehicles that could be available in a few years.
Today at Leader's Questions the Taoiseach referred to the fact that he would be unwilling to borrow additional moneys to fund an increase in employment but would be willing to borrow to fight for support for companies that are going through difficulties with Brexit. The Irish Fiscal Advisory Council, IFAC, could not have been more critical last week, saying that the loss of control in our public finances in the past three years precluded a countercyclical borrowing response in this upcoming budget based on its projections on the likely effects of a no-deal Brexit on the economy. Will the Minister state whether he thinks there will be additional borrowing? Obviously this is difficult because our borrowings keep changing, we refinance some loans and start other loans. Does the Minister expect that there will be a net increase in Government borrowing because of the scenario we are facing.of a no-deal Brexit? If so, what is the timing on that? Will that be agreed on budget day or is it pending a no-deal outcome after the fact? How does the Minister forecast for what he will borrow next year?
I was in the Chamber when the Taoiseach answered the question put by Deputy Howlin. He simply made the point that it is better to borrow to keep somebody in a job than it is to deal with the consequences of the person not being in a job. Lest there be any doubt about this, when we have to make additional resources available to pay jobseeker's benefit as more people become unemployed, we will of course, do that.
On the issue of the general assessment of our preparedness in terms of the national finances, options could have been taken in recent years to bring us to the point where we would have a higher surplus that we are projecting to have this year. However, if levels of capital investment in our economy were still in line with where they were in 2014 to 2016, no doubt I would be facing the charge that the Government was not investing enough in building more homes, hospitals and so on.
That is true.
On the question of whether I am prepared to borrow to deal with the shock of a no-deal Brexit, the answer is "Yes". While a swing in the national finances from a surplus 0.4% in an unchanged world of to a deficit of 0.5% to 1.5% is considerable, that 1.5% deficit is still a lower deficit than we had a number of years ago.
I think the criticisms of both Mr. Michael Tutty and Mr. Seamus Coffey, both men of the highest experience, were not about increasing capital expenditure but the fact that the budget outcome forecast one year was €72 billion and the actual outcome a year later was €82 billion. That was not because of an overrun on the children's hospital or on the national broadband plan, which we have not spent on yet, but increased spending in every area. There was a €10 billion difference between what we expected to spend and what we did spend.
Is the Minister projecting to increase borrowing in this budget that may give additional fiscal space to the stated €2.8 billion that IFAC has agreed? Is there potential for a larger budget?
: Only if the outcome is a no-deal Brexit. I will not be in a situation where we will have to move outside budget parameters when a no-deal Brexit does not happen.
We will not know that until the end of October. How will we decide that on budget day?
I will be laying out the measures I am willing to take should we find ourselves in a no-deal Brexit.
Could that money be borrowed?
I have two further questions. The Oireachtas committee agreed a broad consensus, with some exceptions, that we should increase the price of carbon to €80 a tonne by 2030, which would mean a €10 increase in 2020 and an increase of €5 per annum thereafter. It is reported in the newspapers today that Fianna Fáil believes that the increase in the first year should be lower and it is also reported that the Government agrees with Fianna Fáil that we would not increase it, as the Oireachtas committee recommended. I would be keen to know if the Minister has any view on that.
We held an event in the audio-visual room during the summer where we brought in the best expertise to look at how one would use that money and it confirmed in my mind the view that giving back the money as a cash back dividend is progressive and hugely beneficial. In social progressivity, it really benefits those on lower incomes. It has the desired effect of lowering emissions, it gives a clear signal and politically it is beneficial insofar as we do not have to decide between one sector or the other as to where we would allocate the revenues that would be raised. It would take the issue out of this annual debate, where in this case Fianna Fáil is saying that although it agreed the position a few months ago it is now scaling back because there is understandable political heat around it. The cash back approach is the best way in my mind to introduce this and give certainty and gain political acceptance. I would be interested to learn whether the Minister is still considering that option and will still consider it. Has he agreed with the Oireachtas committee's graduated approach or has that changed now?
Deputy Ryan asked whether I had made any decision on the level of change on carbon tax and the answer is no. I have had discussions with Fianna Fáil, and we have both publicly acknowledged that these are just about the overall issues we have to think about in terms of the budget. On the question of whether I have made any decision if we were to do a change in carbon tax and how we would handle the revenue generated by that, again at this point, we are considering options, we have not made a decision. However, I have said on a number of previous occasions that if we are going to make changes in carbon taxation, we have to treat the revenue from carbon taxation in a different way from other tax changes that we have done. For example when I made the change last year on VAT, that went back into general Government revenue. If we are looking to make a considerable change in the price of carbon in our economy, we will have to demonstrate to the country that the money is being used in particular ways.
On the question of the level of change that is being made or could be made, I have not made a decision but I am very mindful of the effect that Brexit could have, of the impact that a lower value of sterling could have on the price of fuel and of some of the issues that Deputy Breathnach raised.
I wish to flag another issue to throw into that mix. I know the Department of Finance came out with a report in the summer, stating the revenue should not be given back in a dividend or cash back. I suppose the Department would say that, in terms of asking whether a fox wants a hen house open or not, of course the fox does. The Department wants that revenue, even if it is hypothecated for expenditure on energy efficiency and other measures; it knows we have a massive budget requirement in that regard so by not giving it back as a dividend, it will help their general Exchequer position. Let me put the other political argument in favour of why we should pay a dividend. It is because of the political reason that it builds public support among every section of society. We were going to ask everybody to take part in helping this by giving it back as cash back payment, it fundamentally assists us in actually getting everybody on board. That is a political reason that the Department of Finance could not possibly measure or gauge but it still exists.
I understand that and similarly the idea of any kind of any ringfenced tax would be traditionally anathema to taxation decisions that we make, but as I said I see the taxation of carbon as different from other forms of taxation. The kinds of considerations that I am weighing up at present is that we will have parts of our economy that will experience rapid change as a result of the change to a lower emission economy. It is already happening.
Is there not a case to be made for using the proceeds from changes in carbon tax to help cushion or support people in adjusting or getting new jobs or forms of work? We have not made a final decision in this regard and I am examining both options.
The Minister has made the decision that this will be a Brexit budget. What will make this a Brexit budget, given that to fund what might be needed in the event of a no-deal outcome, the Government plans to borrow?
Although we would have to borrow, we will still outline what the borrowing would be used for. The sole reason for borrowing, if we need to do it, will be to help our economy respond to the effects of Brexit.
Is it correct that it is not intended to use the fiscal space available for Brexit emergency funding and that it will be used for ordinary spending?
No. In last year's budget, €115 million of funding within the budget day parameters was used for dealing with Brexit matters. I am just making the point that if we are to deal with a no-deal Brexit, additional measures will be needed on top of the day-to-day needs of funding the State. If those measures are needed and require borrowing, they will be worth doing.
Last week, IFAC representatives came before the committee and their view was that whatever supports were needed for Brexit should come from available budget funding and borrowing should not be the default option. I take it the Minister does not agree with that.
I gave the Deputy an answer a moment ago indicating that I agree with the statement. I said that within the €2.8 billion, we will look to use the funding to deal with the measures needed to get our country Brexit-ready and dealing with some of the effects of a no-deal Brexit. If a no-deal Brexit were to occur next year, the needs we would have in meeting social welfare commitments and putting in place measures to support different parts of our economy would likely require us to put new funding in place.
It was the view of Mr. Tutty in particular that the country is not in as good a position as it could have been in dealing with Brexit and that surpluses should have been run since 2015, or the past three years, in effect. They did not materialise. Does the Minister have a response to that?
Yes. I have now been participating in debates like this for three years and I have never sat in front of this committee while somebody called on me to run larger surpluses. That has not happened. In my many years participating in debates like this, I have never had a single politician calling on me to spend less. The reason is that it is my job to get the balance right because I have the privilege of being a Minister. If we are going to have a debate on whether we should be running larger surpluses now, I am well up for that debate. Of course, I will ask anybody participating in any of the budget day debates to point to where I had been asked to run larger surpluses or smaller deficits.
More broadly, taking in rates of Government expenditure over the past number of years, the cumulative rate of growth in current expenditure over the past five years was 19%. Between 2004 and 2009, it was 57%. That is the level of difference in comparing now and then. There are 2.3 million people at work in the complete absence of the private sector lending boom that last time was needed to create that rate of employment. I look at where we are overall in our national finances and the broader health of our economy and we are in a very different place to where we were a decade ago.
I am not sure it is a strong or persuasive argument to say the Minister did not run a surplus because Opposition politicians did not ask him to. That is effectively what he said. Representatives of IFAC, an independent watchdog that exists to ensure we do not repeat the mistakes of the past, came before the committee last week and were scathing in their comments.
Effectively, they said the mistakes of the past are being repeated and they advised that surpluses should have been run for the past three years but these have not materialised, with corporation tax receipts masking this. The Minister is having a cut at Opposition politicians for not putting more pressure on him to run a surplus but this does not answer the charge levelled at his door by IFAC.
The Deputy is attributing an argument to me that I did not make. I was very clear in putting forward my argument that the responsibility sits with me. I was crystal clear about it as I agree with the Deputy. It would be a pretty poor argument to put to her that I did not run a higher surplus because I was not asked to do so. I was very clear in what I said, perhaps in anticipation of her retort. I said it is my job to try to get the overall balance right.
For example, the Deputy made the point that there were some areas of unplanned expenditure, particularly those associated with health, that could have been handled differently and better. That would, of course, have caused significant consequences too with respect to citizens and service delivery. It is fair in any debate to make the point about the level of current expenditure now versus where we were a decade ago. That is in the context of us coming out of a crisis and the level of pent-up need and demand to meet that need. The figures I put to the Deputy merit a role in this debate, and that is why I am now putting such effort into managing where we are with expenditure this year and ensuring we can at this point deliver a surplus. I seek to maximise that surplus in advance of getting into any difficulty if such difficulty arises.
I appreciate that the Minister would have been under considerable pressure every year to spend and finance certain public services. Health is a particular difficulty. It is his responsibility to deal with that pressure. I am sure it was immense and that it will continue.
If I acknowledge that again, it will be the third time. I am well aware of it.
That is the process of questioning at a committee. I read the Minister's opening statement, which indicates that public spending must only be financed by revenue that is predictable and sustainable. Corporation tax receipts are neither predictable nor sustainable and yet they were used to plug considerable holes in health spending last year. It looks like we are on track for significant overrun in that Department's expenditure again this year. IFAC has also taken that opinion. It seems that although the Minister for Health has been asked not to oversee an overrun in his budget, he consistently does it anyway. I assume a supplementary budget will yet again be forthcoming to plug another hole in the health area.
It has been worthwhile acknowledging where we are on that. We had a planned budget increase of 7.1% for the end of August and at that time, the actual increase was 7.9%. There was a 0.8% difference between planned and actual expenditure. The figure a year ago was 3.2%. There is a considerable change in the current figures when compared with where we were a year ago. That said, there are still three and a half months in the year and the Minister for Health and I are working very hard to deliver a better overall performance than we did a year ago. As I said a few moments ago, what happened a year ago was unacceptable with respect to the magnitude of the overall supplements required. The group put in place to deal with the matter, chaired by my Department, has met on eight different occasions this year.
It is anticipated that much of the overrun will happen towards the end of the year so the figure could increase.
That is why I have said it is a risk that we must manage better. I am working to do so. Against that, in most of the years in which I have been involved with this process, the magnitude of the health overrun would have been clear at this point of the year.
With regard to Brexit planning, it is accepted that certain sectors are more exposed than others, with tourism and agriculture or agrifood probably being most exposed.
They are big employers in rural communities, particularly in the west and north west. Reports from Ernst & Young last week suggest rural communities could go into a type of recession, while there is a report today from the Central Bank that one third of small farms could go out of business in the event of a no-deal Brexit. These communities and sectors will need considerable immediate support in that event. There are also reports that in the tourism sector we could be facing up to 10,000 job losses and in the agrifood sector, perhaps 12,500 jobs. There is real concern about this in rural communities because in many communities these are the two biggest employers and there is no alternative source of work. Will specific supports be provided for in the budget for the tourism and agrifood sectors that would be put in place immediately, rather than adopt a wait and see approach to see how bad things are and then borrow money?
I will have to work on that issue because one of the other points the IFAC has made is that supports need to be temporary, targeted and timely. We need to be very careful when we say potential supports are available and then grant them, even though a no-deal Brexit does not happen. That would create a considerable and significant deterioration in the national finances. I have not made a decision on that matter. It is fair to say most of the resources that might be available would be for how we deal with a no-deal Brexit because I am well aware of the impact it would have on the communities to which the Deputy refers.
It is clear from the budget the Minister is preparing that there will be a tax package and a social welfare package. The official statistics will show that we are in surplus, not a no-deal situation, where we will be in deficit, yet, as the Minister says, it is being framed as a no-deal budget. If it was really being framed as a no-deal budget, it would be very different because it would show the deficit. They would be the official figures and so on. I am concerned about the package that will be available to deal with contingencies. Unfortunately, not much information on the sector-specific analysis has been released. It would equip us to see what would be the best responses for those sectors in the context of there being no deal. None of us knows what the real impact would be, but there are some things we can predict in respect of the agrifood sector and what will happen if sterling moves to a certain point because certain sectors are price-sensitive.
We have argued for a Brexit contingency fund. On Brexit preparedness, the Minister has said he has the rainy day fund. We have heard the IFAC tell the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach that the rainy day fund cannot be used to fund Brexit mitigation measures. As set down in legislation, it is very clear that there are three criteria for its use: structural reform, financial support and natural disasters but not something that is anticipated or identified. Is the Minister suggesting the rainy day fund can be used to support sectors such as agrifood and tourism in particular regions that will be hit by Brexit, particularly a no-deal Brexit?
The deposit into the rainy day fund has not happened.
I know that. That is why we are suggesting that it be moved into a contingency fund.
That point is relevant to the debate we are going to have. The deposit has not yet happened. If it had happened and we were dealing with the consequences of a no-deal Brexit, section 9 of the Bill would allow me to use that funding to deal with those consequences. It is semi-moot at the moment because the deposit has not happened.
IFAC, which considers the rules on spending, and some of the information we got from the Minister through freedom of information requests are very clear that it cannot be used in the context of Brexit. The language the Minister uses is very measured because he refers to the tail-risk Brexit, but the fund cannot be used for issues identified. Some of the documentation from the Department specifically states that it cannot be used for Brexit. That might be a moot point, as the Minister said, because the money has not been lodged. Has the €1 billion from ISIF gone into the fund?
I do not believe it has but my recollection is that it was planned for the end of the year.
Yes. There was €1.5 billion to go in at the end of the year and €500 million from next year's budget. Would it not be wise, given the political and economic likelihood of a no-deal Brexit, not to lodge that money with a fund when there is at best a question mark over our ability to use it for that, and create a fund instead that could be left in the surplus but that could be drawn down when and if it is needed to deal with sectors and regions in response to a no-deal Brexit?
I am considering options on this because I am under no illusion as to what a no-deal Brexit could mean for parts of our economy. I will take on board what the Deputy says. I simply have not made a decision yet on the use of that funding. The Deputy is correct. I am being careful in my use of language on how a rainy day fund could be used because it is described as being used for dealing with tail risks of a no-deal Brexit. I am considering the use of funding like that and how it would be managed, but the first matter I want to be clear about is the right level of support.
Fine, we have argued about the design of the rainy day fund for a long time and I am encouraged by some of the commentary the Minister referred to. He should not lock down resources that may not be available to us if we need them for Brexit, because otherwise we will have to borrow those resources.
I am well aware of that and I am trying to make sure that we have sufficient flexibility to deal with risks. We know of many of them, but if a no-deal Brexit were to occur, that could have many different effects in our economy.
We heard some discussion in the Chamber earlier today about the sector-specific analysis, but surely more analysis has been done, sector by sector, on a no-deal Brexit. I would find it scary to believe that everything that has been done has been published, as was suggested earlier. There has to be serious consideration given to the impact of no deal, sector by sector and region by region. It may not be released for whatever reason, negotiations are continuing and so on, but will the Minister put me at my ease by saying that work has been carried out? Is it not time, or when is the time, for the Minister to release that information and make it available to the public, and to us as committee members, to discuss and plan the best response for those sectors in the event of no deal? Otherwise, a rabbit will be pulled out of a hat because we have not seen any of the detail.
All the information available to me is aggregated for the total economy. As that information has become available to me and it has been made available to the Oireachtas throughout the past 18 months.
Each Department has done an analysis on the part of the economy for which it is responsible. The Deputy referred to some figures for tourism. The information that I now have available is for the total level of the economy.
It is scary that there is not a sector-by-sector analysis and that we are not looking at the transport sector to ask what it will mean for HGVs, for instance. Even if one forgets about delays at the Border, which of themselves will cause serious problems, what else will Brexit bring to that sector? Where will there be job losses? How can we ensure that our goods will be transported, etc.?
To be crystal clear, much of that has been published in the Brexit contingency plans, which were made publicly available on two separate occasions. I am well aware of the work, sector by sector, that each Department has done to identify the impacts of Brexit on different parts of the economy. That is available.
Yes, but when was that published? Was it in January of this year?
No, it has been published on many occasions.
My point is surely work is ongoing.
I am answering the Deputy's question. The last contingency action plan was published before the summer. It referred to different impacts that Brexit might have on different parts of the economy. Work is ongoing on the sectoral impact in the greatest level of detail possible.
I raised the duty-free issue with the Minister during the debate on the Brexit omnibus Bill was that of duty free. On that occasion we legislated for it but the Minister had had assurances from his counterpart, Philip Hammond, that the British Government would not go down the direction of a duty-free zone. That has obviously changed. At the time, the Minister clarified to the House that this would be of serious significance for himself and the Exchequer. Now that it potentially is a reality, given a no-deal Brexit, what is its significance? What will be the hit to the Exchequer? Is it just the case that it will be balanced off given that we have reciprocated? In that debate I raised an issue, which was picked up earlier by Deputy Breathnach, namely, that there are three well-established ferry crossings between North and South. I know that this would require authorisation but there would be an EU frontier on our island. Is there now a scenario where one could nip across the Border on the ferry and, as one can in London, buy 400 Silk Cut purple for £63 rather than paying €260 for them in the shop in the South? Is that a real scenario? The crucial point is the impact of duty free on the Exchequer.
It is a budgetary matter, but given the difference between the price of 400 cigarettes on a flight to Manchester, Glasgow or wherever, at £63 compared to €260 in the shops here, I assume that the Minister is not looking to increase the price of tobacco products. Is this something he is worried about?
I will not comment now on the specific locations or the issues which the Deputy raised, but I am aware of the issue.
On how I previously described the introduction of duty free, it is correct that I said I would only bring it in if it was instigated elsewhere. That happened last week. On its overall cost, the Deputy is correct that other things could happen that could reduce the cost of this to us overall. However, when we get into the realm of working out what they might be, it is very difficult for me to put a figure against that as we must make all kinds of assumptions on consumption and where it would occur.
I have a highly approximate overall gross figure for the potential impact of the introduction of duty free, which is up to €350 million. That would be included in the no-deal Brexit planning to which I refer. That is based on the assumption that a certain number of passengers would avail of duty free and would buy a certain amount of cigarettes and alcohol.
So that includes alcohol.
Finally, on the budget, since we last met at a committee, countless businesses and community organisations have closed their doors. They have closed because of the rip-off in insurance premiums and because certain insurance companies have withdrawn from the market. We know that approximately 16 companies that sell into Ireland will no longer be registered etc. as a consequence of Brexit but there is a particular crisis in a certain sector, namely, bouncy castles, adventure centres and that entertainment sector, which no company in Ireland or Britain will insure. Jobs are being lost week in and week out. Unless there is an intervention, whether it is budgetary or the Minister sitting down with the industry, a situation will arise where children will never be able to have a birthday party with a bouncy castle again, as there will be no company providing them in Ireland as they will not be able to get insurance in Ireland or in Britain. When Leisure Insure withdrew from the market, it caused serious chaos. We are now waiting for companies' renewals to arise, at which point they will be left high and dry. The company that underwrites Leisure Insure is AXA XL. When AXA XL moved its headquarters from Britain to Dublin as a result of Brexit, two Ministers issued a press statement to tell us how good this was. Surely, Ministers should sit down with AXA XL and Insurance Ireland to address the crisis we face both in the fabric of how our children play and so on and in the thousands of jobs that are at risk as a consequence. There is now a complete market failure. I wrote to the Commissioner, who said there was no reason why the State cannot intervene and investigate a market failure in this scenario. There is a market failure in the insurance industry. Will any budgetary measures be introduced in the next three weeks that will address this issue? Alternatively, is it a case of wait and see, where we can sit on our hands and let company after company, some which have operated for 20 or 25 years, to just close their doors one after another?
I am well aware of the impact the rising cost of insurance is having on smaller companies in Ireland in particular. I well understand the issue raised by the Deputy regarding the leisure sector given the profile that was received before the summer. The Deputy knows as well as I do that I cannot comment now on any budget day decisions on any sector. I will observe that any response by myself or the Minister of State, Deputy D'Arcy, to that sector overall cannot be characterised as sitting on our hands. A huge effort is ongoing to deal with rising motor premiums and rising insurance premiums here. Most of the response back to this rests in policy rather than budgetary policy. The Minister of State, Deputy D'Arcy, and I are working closely on that.
The Minister needs to meet Insurance Ireland. That is what this sector demands.
I now call Deputy Eamon Ryan.
I return to the question of additional borrowing. The Minister is absolutely correct that over the years, politicians have all looked for more spending on everything but on this occasion, it was meant to be different. We are a budget oversight committee, the first of its kind. We had a meeting earlier today with the Parliamentary Budget Office, which we have resourced to advise us. Last week, we had a meeting with the Irish Fiscal Advisory Council, which was established after the crash to specifically avoid what the Minister just mentioned. There was an accusation that no one from the Opposition was calling on the Minister to spend less.
The Irish Fiscal Advisory Council would say that the Opposition did not know where the goalposts were because they kept moving. In our budget submission every year, we tried to address what the council was saying because we wanted to learn the lessons of the past. What the Irish Fiscal Advisory Council says is true, that even when that was done, it did not matter because the Government turned up on budget day with a whole load of additional measures. That meant it was a different game that everyone was playing and we were not comparing like with like.
I was unable to get the record that is usefully prepared of what the representatives of the Irish Fiscal Advisory Council said last Thursday but my recollection, which can perhaps be checked and we can come back to it, is that they were fairly clear in referring to €2.8 billion. The council said that its assessment was that, even with a hard, crash-out Brexit, we would not go into a recession, although it would cause a dramatic fall in gross domestic product, GDP, or gross national income, GNI, or whatever measure one wants to use. The Irish Fiscal Advisory Council did not anticipate an immediate recession that would warrant the sort of borrowing the Minister is talking about. If I recall rightly, the council representatives said that, if the economy did go into recession, one could then switch to countercyclical borrowing, but they advised against doing that in this budget. I wanted to check the record because I think that advice even covered specific, additional measures that the Minister might want to prepare for sectors that might need it. I stand to be corrected when I read the record and it is difficult to check with those witnesses because they are independent, so we will have to check the record.
My understanding is that the Minister has said today that the Government intends to ignore the advice of the Irish Fiscal Advisory Council and engage in additional borrowing. Each party is working on its financial submission and ours was based on an intention to borrow, to be honest. We had to turn that 360 degrees around last Thursday because we could not ignore that the Irish Fiscal Advisory Council said that does not look prudent. We had to scale back our borrowing intentions and we are now looking at a few additional tax measures to cover some of the amounts that need to be spent. The point I am making, in a long-winded manner, is that it seems to me that the Minister is saying that he will not take the advice of the Irish Fiscal Advisory Council subject to a no-deal Brexit. The council factored that in and said, even in those circumstances, the Minister should not do the amount of borrowing he is talking about. Is he not going to do that?
I am saying that we would only significantly change our budgetary position if a no-deal Brexit actually happens.
As I said, I need to check the record, but my understanding is that the Irish Fiscal Advisory Council is advising that, even assuming a no-deal Brexit, the Government should live within the €2.8 billion. The council always says that additional tax measures could be raised which might have some dampening effects. Let us take the example of a tax on financial transactions. That would probably not affect the agricultural and rural sectors that might be affected by Brexit, so it could be transferred in that manner. There are ways to address the sectoral issues that would arise in a no-deal Brexit without necessarily resorting to borrowing. If we do enter a recession, we should be doing a green, new deal stimulus borrowing package, but I am loath to ignore the advice of the Irish Fiscal Advisory Council. The Minister seems to be doing so.
I do not believe I am. I thought I had an appreciation of the advice it has given. We published this in the summer economic statement where we outlined that there could be a move into a deficit of between 0.5% and 1.5 percentage points of national income. I published that before the summer. I want to make clear that we will, of course, need to deal with many of the different issues in getting ready for Brexit and the challenges that will bring within the framework of the €2.8 billion and look to expand that, if necessary, through revenue-raising measures. That is the case.
Just for the record-----
I want to be clear-----
I am sorry for interrupting the Minister, but we are putting up on screen the record of the meeting to which Deputy Ryan was referring.
That is very helpful. If we scroll down to the next page, what the Irish Fiscal Advisory Council representative said was that measures to deal with the cost of a no-deal, hard Brexit should be accommodated as far as possible. Mr. Seamus Coffey said: "The council has repeatedly criticised the Government’s medium-term plans for not being credible." He goes on to say, as I said, that that accommodation of a no-deal Brexit might mean a tax-raising as well as a spending measure. That is how I read it.
Yes, and I think that is also a fair reflection of what I said a moment ago. If I look at what the cost of a hard Brexit might be, of course I will look to accommodate that insofar as I can in the budgetary framework of €2.8 billion. We will look at how to expand that through the normal revenue-raising measures available. I am simply making the point that if a no-deal Brexit happens, the level of support needed for that could be significant. I will look to deal with as much of that as I can through revenue-raising measures that I will put in place.
I thank Deputy Ryan and call Deputy Michael McGrath.
Can I just make a point? A novel technique is being used here where the text of previous witnesses is being presented in real time. I hope this is used fairly in other committee meetings and I am sure it will be but Mr. Coffey also said earlier on that day:
A large budget deficit could emerge due to falling taxes and rising unemployment-related costs. This is even before potential customs infrastructure and supports for hard-hit sectors are considered.
That is the point I am making. If a no-deal Brexit occurs and we must deal with the consequences of that in real time, the State may need to look at the options that are open to it, apart from its ability to raise revenue through tax measures.
Let me know if I ask anything that has been asked.
I want to ask about the overall position and scenario B on page 26 of the summer economic statement wherein the Minister outlines that, in a disorderly Brexit scenario, the indicative deficit could range from -0.5% to 1.5% and the amount the Government would spend to result in those outcomes. Why did the Minister go with a range for the deficit? Is the €2.8 billion based on a 0.5% deficit or worse? What does the Minister envisage being the package in the event of the outturn being a deficit of 1.5%? Could he explain that?
The €2.8 billion is consistent with a surplus next year of 0.4% of national income.
That is in the event of an orderly Brexit.
Yes, in an orderly Brexit. I opted for a range because we are dealing with an unpredictable event. It will be important that, if we are dealing with the consequences of an event like this, we are able to establish a path for recovering our deficit back into a balanced position and an eventual surplus. We will have to do that nearer the time but there is significant unpredictability in dealing with this kind of an event. I do not want to be in a position where I am laying out an exact deficit figure here that it turns out we have got wrong through failed attempts to model something that is very unpredictable.
Sure. Is the range the Minister outlined based on going beyond €2.8 billion in the budget day package on the assumption of a disorderly Brexit?
It is, but the measures are only for dealing with a disorderly Brexit.
Okay. That has not been quantified yet.
Not yet, no.
That is why the Minister went with a range for the outturn.
He intends potentially, in a no-deal scenario, to go beyond the €2.8 billion. Will that €2.8 billion contain an amount for Brexit response or will the Brexit response be alongside and outside that envelope?
I anticipate that part of the €2.8 billion will deal with normal Brexit measures that we have taken over the past three years. It is important to reiterate that, if a no-deal Brexit takes place, it may well be necessary to go beyond that, for example to deal with the consequences of more people needing unemployment benefit next year.
Will it be the demand-led repercussions of Brexit that will result in the end in that deficit rather than upfront commitments such that in the event of a no-deal Brexit one will do A, B, C and D?
It will be mostly the things that are demand-led that will have an effect. They will be demand-led but driven by rising unemployment and falling tax revenues. That will be the biggest constituent. There may well be a need to outline support measures for the economy that will also be included.
If my next question about corporation tax has been asked, the Chairman can tell me.
The Minister previously indicated that his Department was going to undertake some work in reviewing the sustainability of receipts and would consider potential policy responses. That is what he said a number of months ago. The need for that work is now greater than ever. Will the Minister update the committee on that work indicating where it stands and where we are going?
We nearly have it done. We have been looking at two things, the first of which is putting in place a process to give us a view on the sustainability of corporation tax receipts. We are aiming to have that work done by next March. I think we have already discussed that issue here. Deputy Cowen asked if we could give an indication that it would be brought forward to get it done sooner. Given the magnitude of the work involved, I am not sure we would be able to do so, but I said I would look at the issue.
On the measures that might be needed to deal with the consequences of a reliance on corporation tax receipts in the future, the latest I will have that work done is budget day.
The next issue is international tax reforms. The Minister spoke at the PwC tax summit this morning. My next questions are about base erosion and profit sharing, or BEPS 1 and 2, an issue I have raised with him in parliamentary questions and so on. Has the Department scoped out, with Revenue, the potential impact on Ireland of receipts in the full implementation of BEPS 1? What is likely to emerge in different scenarios in respect of BEPS 2, particularly in the context of the minimum effective global rate of corporation tax and the changes in respect of where corporate profits will be allocated and taxed?
In so far as we can, we will look to accommodate the effect of BEPS 1 in the corporation tax receipt forecasts included in our budget day publications. In terms of BEPS 2, we do not currently have enough detail available to us to be able to give a view on the impact on the different pillars and the collection of corporation tax.
Is it the case that the OECD is working on an impact assessment that is country specific in terms of what it might mean for each country? Is the Department or Revenue working with the OECD on the consequences of BEPS 1?
On the consequences of BEPS 1-----
Yes. What might full implementation mean in the collection of revenue or for the yield from corporation tax?
I am not aware that the OECD is conducting country by country impact studies to assess what the effect of BEPS 1 could be in the collection of corporation tax. That is work we have to do.
Towards the end of his questioning Deputy Doherty raised the issue of insurance. Perhaps he did not have a chance to press the Minister on it further when he said the response would be more on the policy rather than the budgetary side. As the Deputy outlined, there is a real crisis. As policies come up for renewal, more and more traders, many of whom are self-employed, are finding that there is no offer of insurance cover because essentially their provider has left the market. It may not be a big bang because it is not all happening together, but as policies come up for renewal, they will have to close their businesses, something which is happening increasingly. I have a question for the Minister, even though I know that this matter falls directly within the remit of the Minister of State, Deputy D'Arcy. It concerns financial services. Is the Minister aware of interventions or initiatives under way to ensure those involved in the leisure sector, in particular, can continue to access insurance? It is going to be on fully commercial terms, but at this point many of the people in question are facing a scenario where they will not be able to access insurance, which means automatically that they will have to close their business.
As the Deputy said, there is no single policy intervention. There is going to a big bang. I am well aware of the effects the issue is having business by business.
In terms of what kind of work is happening at the moment, the Deputy will be aware of the work that the Minister of State, Deputy D'Arcy, is doing on the book of quantum. Recently the Minister of State met underwriters on this issue and he spent much of the summer engaging with insurance providers to see how we can make progress.
In an earlier debate that we had, I was asked if there was a budgetary policy on this matter. The question that I would have to be satisfied with is how a levy or additional taxation would address the issues the Deputy referred to, given we already have a number of levies in place in the insurance sector.
Will the Minister outline the role of his Department at this stage of the broadband process and the role of his other Department, Public Expenditure and Reform, in terms of the detailed contract negotiations? Has the Minster a team of people working on the details with the Department of Communications, Climate Action and Environment? Will he tell us how that works in practice? Has there been an assessment of full compliance with the public spending code and so on? Is further work being done on a cost-benefit analysis? Will the Minister bring us up to date on what work his Department is doing now at this stage of the process?
Because we are in the final stages of getting ready for a decision on signing the contract itself, most of that work is being led now and done by the Department of Communications, Climate Action and Environment. My Department will be involved in the final report on this issue that the Minister, Deputy Bruton, brings to Cabinet.
Does that mean the Department of Finance is not directly involved at this point in negotiating the contract with the sole bidder?
No, we are not.
When the Department of Communications, Climate Action and Environment has completed its work as it see its, the matter will go to the Minister's Department. What will it do at that point?
At that point it will come back to my Department. We will look to see whether any of the actual figures that we have differ in any material way from the figures that were available to us when we made the decision to go ahead with the broadband process.
I am conscious of the fact that we are reaching the end of our session. Deputy Doherty indicated he had a short quick question.
I have three quick questions. If the overrun in health stays at its current level - 5.8% was projected and 6.7% is the outturn - there will probably be an overrun of about €158 million. The impact on this is massive. It has been budgeted to recruit as many as 1,300 nurses, 100 of whom are in the north west, but the posts are not being filled. The list of people waiting more than 18 months has increased by 2,000 persons. As many as 3,600 people in Donegal are waiting more than a year and a half. It does not make economic sense that we starve the service. I know that the Minister will reply that this is the biggest health budget ever and all the rest, but I am a year older than I was last year as well. The reality is that 1,300 nurses were budgeted for, but they are not being accounted for and, therefore, procedures are not being carried out in hospitals. We need to deal with this matter. The simple idea that, above anything else, we must stay within budget does not make budgetary sense and is definitely not patient centred.
On the insurance industry, I refer to the point that I made, which is the same point that was made by the Alliance for Insurance Reform, in particular. When AXA XL relocated here as a result of its Brexit contingency plan, two Ministers issued press statements. We are asking the Government to meet the insurance industry. It is not just a case of high premiums, but that people cannot get any price. In motor insurance, if a person gets three refusals, the industry must give a quote, but the same does not apply to public liability. We need to consider solutions and there are no easy or quick-fix solutions. There probably needs to be market intervention at this stage because we cannot allow the entire sector to go.
I do not have the summer economic statement with me, although I did try to bring it up on my phone, but in terms of Brexit, looking at option B, the no-deal Brexit scenario, there is a €2.8 billion package for year one, and then for every other year for the next four years there is a package totalling in the region of €3 billion.
The Minister may correct me if I am wrong but it demonstrates that within five years, in a no-deal scenario with a budgetary package in the region of €3 billion each year, the State's finances will be back in surplus. Is that correct?
Is the Deputy looking at page 26?
It shows that in a disorderly Brexit, we would have the ability to be back in a position of approximate balance by around 2023.
Yes. That is four years.
I do not have the figures available to me now about the budget day packages underpinning that.
The figures on page 26 are based on the baseline scenario and the table on page 27 indicates budgetary packages of €2.8 billion this year and €3.2 billion next year, followed by packages of €2.9 billion, €3.3 billion and €3.4 billion.
Brexit will be terrible, particularly in certain sectors and regions. From a fiscal perspective, these figures are based on the outer range. We look at the Brexit impact from 0.5% to 1.5%. The €6 billion deficit is based on the outer limit of that.
Okay. With a €3 billion package over the next five years and looking at what is at this stage the worst-case scenario of what we think a no-deal Brexit will be, the State's finances will be back in surplus by 2023. It will be back in surplus more comfortably in 2024. Is that correct?
I just wanted clarification on the point.
This leads to the broad point worth making that even in the case of dealing with a no-deal Brexit, it will be possible over time to continue to invest in our public services and put improvements in place.
It is the reason I am highlighting this. Brexit cannot be used as an excuse to stall the type of advances and restructuring that we need in health and dealing with the crisis in housing. My fear is that the public is being led to believe we will not be able to do anything because of Brexit. A no-deal scenario is not a pretty picture and nobody wants to be in the scenario where a general government balance is in deficit over the next three to four years. However, even with quite significant budgetary packages, the economy will continue to grow and tend towards balance. Will the Minister address my earlier points, particularly the impact of the health budget? Will he give us a commitment on having serious talks with Insurance Ireland?
I am not giving any indication that dealing with a no-deal Brexit will create the kind of circumstances that we had to deal with in 2008, 2009 and 2010. It is very different in scale and that is the reason I am saying that even in a no-deal Brexit, commitments with respect to capital expenditure and dealing with the demographics of our society should still be met. We can do so. Notwithstanding the debate we had earlier, we have an economy that is able to deal with the challenges of Brexit and to meet the other commitments we have. It is what I want to do.
In the first seven months of the year, we had an increase of 1,138 whole-time equivalents working in the health service.
Going back to the debate we had earlier, I am very aware that any decision I make about budget supplements for the Department of Health and elsewhere has a really big effect on services and citizens. I was very much aware of this when I made the decision last year. If I had taken other steps to reduce the scale of supplement beyond what it was at that point, I would have faced other charges on the effect. I made the decision and I am accountable to Members for t. As I stated to Deputy Lisa Chambers in our earlier exchange, issues, mistakes or things that could have been done differently are my responsibility. I made the decisions conscious of the consequences at each point in time.
The Deputy asked about dealing with the insurance sector. I have participated in engagements and discussions on the sector with the Minister of State, Deputy D'Arcy. When the budget is done and in the light of the points made by the Deputy, I will work with the Minister of State to see if further engagement involving me could make a difference.
Does the Minister know how many companies will close between now and budget day?
In the context of the matters we have discussed, I have three weeks to put together a budget to respond to the many grave issues people have raised. I do not want to make a diary commitment to the Deputy that I cannot fulfil.
I thank the Minister for the answer. I also thank the remaining Deputies for their participation in the meeting. It has been a long day for the committee, as the meeting commenced at approximately 1 p.m. I appreciate all of the contributions throughout the afternoon by all of the Deputies. I thank the Minister and his team of officials for coming to partake in this engagement.